Anticorruption Update – PAN Unveils its Initiative, Finish Line in Sight

Previous posts described the latest developments with the Anticorruption Reform in the Chamber of Deputies (the Senate passed a version of the reform in December 2013). Although long-delayed, it appears that the Congress will pass the reform during the current legislative session. So far, the PRI has been the only party to put forward a detailed proposal implementing the anticorruption promises from the Pact for Mexico. Last week, the PAN released its proposal for debate in the Chamber of Deputies.

Background

In December 2013, the Senate approved a version of the reform that was almost identical to Pres. Pena’s proposal. The reform then languished for ten months in the Chamber of Deputies. Last year, the PAN and PRD did not articulate detailed proposals in opposition to Pena’s, despite expressing fundamental disagreement on certain elements.

In recent debates the parties have focused on whether an Anticorruption Commission is needed as a replacement for the Secretary of Public Administration (SFP), which is currently the only body with an anticorruption mandate (part of Pena’s reform proposal involves shuttering the SFP).

Indeed, the central issue in the Anticorruption Reform debate is who (which institutions) will fight corruption. Mexico already possesses an adequate legal framework for acts of corruption. Rather, Mexico, like many countries, has fallen short on enforcement.

Political Context

The political battle over the reform is between the PRI and PAN, as they have the most members whom a new anticorruption enforcer could target. In particular, the PAN may worry that a PRI-appointed enforcer would focus on scandals that arose under the previous two PAN administrations.

congreso partidos porcentaje

The current party composition of the Mexican Congress is complicated (image shows % breakdown for each party).  Neither the PRI nor PAN can pass constitutional reforms (need 66.7 percent) or regular legislation (need simple majority) without the support of one or more third parties (for full numbers and excellent infographic, go here). But both the PRI and PAN have the power alone to veto constitutional reforms. Thus, the PRI and PAN must cooperate on constitutional reforms, but the PRD’s support is key for regular legislation.

PAN Proposal

Last week, the PAN unveiled a somewhat more detailed version of its reform proposal. Here is a video from the press conference:

The PAN proposal contains six elements:

  1. National Council – create a National Council comprised of all government entities and ‘broad’ citizen representation
  2. Citizen Public Ethics Committee – establish a committee whose members are well-respected in the anticorruption field; responsible for establishing ‘citizen observatories’ around the country and for making complaints and formulating public policies to fight corruption
  3. Internal Control Improvements – strengthen the SFP in the areas of audit and investigation, with Senate approving its chief; a qualified majority of the Chamber of Deputies nominates chief of the Supreme Auditor of the Federation (ASF)
  4. Enforcement – proposes two agencies that are completely independent from the executive, responsible for auditing the use of public resources and investigating corruption ‘with the broadest powers’; both bodies will receive and respond to citizen complaints; the agencies are:
    1. Supreme Auditor of the Federation (ASF) – change constitution to amplify auditing/investigation powers
    2. Special Prosecutor for Combating Corruption – same as the office created in February of this year; provide broad investigative powers; head approved by 2/3 of the Senate and be completely independent from executive
  5. Sanctions – move power to impose criminal sanctions on government officials for corrupt acts to criminal judges (based on criminal charges by prosecutors); move power to impose administrative sanctions to Federal Court of Fiscal and Administrative Justice
  6. State/Local Implementation – via constitutional amendment, reproduce the same system at the state and local levels of government

Reaction to PAN Proposal

The other main political parties provided their views on the PAN proposal after the announcement. One PRI legislator on the Political Coordination Committee in the Chamber of Deputies stated that the PAN proposal “goes along with that of Pres. Pena” and the PAN idea of implementing a national anticorruption system is “very acceptable.” The PRD was not critical of anything specific in the PAN proposal, but argued that both the PRI and PAN proposals would be insufficient to deal with the problem of corruption. Instead, the PRD proposes adopting more systemic measures such as strengthening auditors within all government agencies.

Analysis of PAN Proposal

Although it lacks some details, the PAN proposal reveals a few key perspectives on that party’s thinking about the Anticorruption Reform. First, the PAN would prefer to create new agencies that have no enforcement power (National Council and Citizen Ethics Committee), while retaining those that are already in place (SFP, ASF, Special Prosecutor). This arrangement disperses anticorruption enforcement across multiple agencies and ensures that the enforcers – Special Prosecutor, SFP, ASF – will be known quantities. Second, it looks like the PAN is ready to work with the PRI (and vice versa), as the two proposals are not incompatible. This is unsurprising due to the vote math – neither party wants to breach the Pacto on this issue.

One interesting potential outcome would be the survival of the SFP. The PAN wants to keep the SFP and the PRI does not want the headache of creating the Anticorruption PrintCommission, so everybody wins. For its part, the SFP has been doing its best work recently, with a 50 percent increase in number of sanctions and double the number of officials punished. These impressive results have all been accomplished while operating with an ‘acting’ chief and a 31 percent reduction in staff. Most important, the SFP has recovered fines of around USD 470 million during the current administration (from fines the SFP imposed during the current and previous administrations). This seems like an amazing number. That’s USD 734K per day over the 21 month period. For comparison, the SFP had recovered only USD 5.8 million over the preceding 20 years. Keep in mind that they are mostly collecting from individuals. The increase is shocking.

sfp fines

The SFP has been more vocal about the correct strategy for the fight against corruption, and gave a nod of support to the PAN proposal. People close to the SFP have told me the reason for its recent increase in confidence was knowing that it would be liquidated by the Anticorruption Reform. This removed political pressure from the SFP, allowing it to focus on working cases. Another possible explanation: the SFP hoped the Congress would reconsider the need to replace it – i.e., auditioning for their own job. Another reason for the uptick in activity is that the change in power from PAN to PRI. The SFP faces less political resistance from the executive branch to going after panistas. Ironically, if the SFP survives it will in large part be thanks to the PAN, as the PRI had not floated idea of keeping it before.

As for the PRD, it is confusing to read their statements and guess at what they want. Their ideas – e.g., strengthening internal audit units at government entities – don’t seem consistent with what is in the Pacto. Perhaps the PRD assumes that neither the PRI nor the PAN are serious about fighting corruption. The PRD can sit out the debate and maybe vote against the final proposal. Once everyone realizes that the reform has not changed anything, the PRD will not be ‘tainted’, and can argue that the failure was a feature, not a bug, of the PRI/PAN.

Skeptical Public

No matter the form the Anticorruption Reform takes, the people in Mexico are skeptical that a purported ‘war on corruption’ is real or will have any real effect. A recent public opinion poll found that 43 percent of those surveyed believed that an Anticorruption Commission would have no effect on corruption levels in the country:anticorruption commission Q In the same survey, 48 percent of respondents indicated that the government was more to blame for causing corruption, versus ‘citizens’ (13%), ‘businessmen’ (5%), or ‘everyone’ (30%). Every bribe transaction requires at least two guilty parties, one in the government on the receiving end and one from private sector/society on the giving end.

Although this suggests a 50-50 split in guilt for ‘causing’ a specific corrupt act, I agree with the Mexicans who answered the survey. The government receives a guilt ‘premium’ because officials should act in the public interest, but we expect people to be more greedy in their private dealings. Also, the government should fight corruption, not permit a system to exist where even those found guilty escape punishment. Government allows a culture of impunity to grow by making a sham of its central purpose – ensuring the rule of law.

Mexico is at a turning point in its history and has a lot at stake. It would be unfortunate if the Anticorruption Reform was also a sham, as it is an essential first step towards building the rule of law in Mexico. Without that foundation, none of the other Pacto reforms will be successful in promoting economic growth and development in the long term.

This entry was posted in corruption, economic development, legislation, Pact for Mexico, PAN, politics, PRD, PRI, reform, rule of law, SFP. Bookmark the permalink.

One Response to Anticorruption Update – PAN Unveils its Initiative, Finish Line in Sight

  1. Pingback: Anticorruption Update – Reform Stalls, Scandals Intensify | The Mexico Monitor

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